Formation of The Contract of Sale

Topic: Formation of
the Contract of Sale

NAME: Pritam Das
BATCH: BBA 3rd Semester
SUBJECT: Business Law
SUBJECT CODE: BBA(N)303
ROLL NO: 33
Date: 31.01.2021
Contract of Sale
• Section 4 (1) of the Sale of Goods Act, 1930 defines the

term as a contract of sale of goods is a contract whereby
the seller transfers or agrees to transfer the property in
goods to the buyer for a price
Modes of the contract of sale: 1. There may be
immediate delivery of the goods.
2. There may be immediate payment of price but it may be
agreed that the delivery is to be made at some future date.
3. There may be immediate delivery of the goods and also
an immediate payment of the price.
4. It may be agreed that the delivery or payment or both are
to be made at some future date.
Essentials elements of Contract of
Sale
• There must be at least two parties.
• The subject matter of the contract must necessarily be
goods .
• A price in money (not in kind) should be paid or
promised.
• A transfer of property in goods from seller to the buyer
must take place.
• A contract of sale must be absolute or conditional.
• A contract of sale may be in written or by words or by
mouth or may be implied from the conduct of the
parties.
Characteristics
• Buyer and seller:-The person who buys the goods or
makes an agreement to buy is called the buyer. & the
person who sells the goods or makes an agreement to
sell is called the seller
• Goods:- The subject matter of the contract of the sale is
essential the goods are movable property other than the
actionable claim and money
• Price:- Goods are always sold for a price
• Transfer of ownership:- The transfer of ownership can
be at the time of making the contract or it can be at
future date
Sale:-Sale occurs when the seller transfers property in the
goods to the buyer immediately after sale.
Agreement to sell:- occurs where the seller agrees to
transfer property in the goods or to fulfill some conditions
in the property of goods or subject matter of the contract,
both on some future date.
Difference between Sale & Agreement to Sell
Basic of difference Sale Agreement to sell
Transfer of ownership The ownership of The ownership of

goods is transferred to goods is not
the buyer at the time of transferred to the buyer
contract is made at the time of contract
but later
Right of usage The buyer has the It is only a contract by
rights to use the goods the buyer, it is done
he buys only the goods is
transferred
Consequences of breach The seller can sue the Seller can sue only for
buyer for payment damages
Risk of loss Any loss against the Any loss against the
goods is bear by buyer goods is bear by seller
Nature It is absolute It is conditional
Type of Contract Executed Contract Exccutory Contract
Contract of sale v/s other contract

Sale v/s barter:-When goods are exchanged for goods is
known as barter deal. A sale implies reimbursement for goods sold in
terms of money, so in this case barter deal is not a sale
Sale v/s gift:- In case of gift the transfer of ownership does not
involve any kind of expense
Sale v/s bailment:- The buyer acquires the possession of
goods from the seller but does not become the lawful owner of the
goods, in bailment one person is the bailor who give the possession
of the goods to another for a specific objective, after fulfill the
objective the bailee is bound to return the goods back to bailor
Types of goods
 Existing goods:- These are those goods that are owned by
seller at the time of making the contract
 Specific goods:- These are those goods that are identified by
both the parties
 Unascertained goods:- Unascertained goods are goods
which are not specific goods – goods which are not identified
or agreed upon at the time of the making of a contract
 Ascertained goods: - Ascertained goods in contrast with
specific goods ‘probably means identified in accordance with
the agreement after the time a contract of sale is made’.
 Future goods:- Goods that are not in the possession of the
seller at the time of the contract
 Contingent goods:- These are same future goods, the
acquisition of which by the seller is dependent on a
contingency which may or may not happen

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Formation of The Contract of Sale

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Topic: Formation of

the Contract of Sale

• Section 4 (1) of the Sale of Goods Act, 1930 defines the

Basic of difference Sale Agreement to sell

Transfer of ownership The ownership of The ownership of

Type of Contract Executed Contract Exccutory Contract

Contract of sale v/s other contract

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